Expected Cost of New Hours of Service Regs: $95-376M
Posted: August 1, 2014
ARLINGTON, VA — Despite the Federal Motor Carrier Safety Administration (FMCSA) saying the new hours-of-service (HOS) regulations will create great benefits for the industry, a new study says otherwise.
A report from the American Transportation Research Institute (ATRI) finds that the FMCSA “greatly overestimates the benefits,” while also “ignoring the productivity losses that all driver-types will experience under the new HOS rules.”
One of the biggest changes is the introduction of two 34-hour restart provisions, which give drivers one restart a week and that restart needs to include two overnight periods between 1 a.m. and 5 a.m.
Based on responses from 500 motor carriers and 2,000 drivers, ATRI found that 85 percent of drivers will experience productivity losses. The FMCSA chose to focus on the fact that the new rules with benefit the 15 percent of drivers with the most intense schedules, instead of the 85 percent who will suffer a loss.
ATRI found another difference between the FMCSA’s reported numbers. FMCSA projects a net benefit of $133 million for the restart provisions, whereas the ATRI report estimates a loss between $95 million and $376 million.
That discrepancy, according to the report’s authors, was because “FMCSA ignores costs related to increased congestion exposure and increased restart times which will be experienced across a much larger percentage of the driving population.
“Components of the restart provisions may also result in shipper costs, scheduling issues and could exacerbate the ongoing driver shortage.”
The FMCSA assessment does not take into account the $40 million required annually for motor carrier and driver training for the new regulations, according to ATRI.
As John White, executive vice president for sales and marketing at U.S. Xpress, told the Wall Street Journal, the preparation costs are astronomical. He estimates his companies has spent “probably $100,000 minimum” to get ready for the new HOS rules.